Customers of deceased microfinance businesses, S&Ls, will receive full cash payments from tomorrow

Depositors of the bankrupt Microfinance firms, Savings and Loans and Finance Houses will from Wednesday, September 16 , 2020, have full access to their funds.

It continues the settlement of the initial commercial paper by the state, also known as the bond.

In order to resolve the remaining depositor claims of the 347 defunct microfinance firms, 23 savings and loans and finance houses, the government released a total of GHS3.56 billion on Tuesday.

Affected customers have been guided to visit any branch of Consolidated Bank Ghana Limited via the new funding arrangement to obtain their income.

Eric Nana Nipah, a statement from the recipient, suggested that consumers who have already received or are due commercial paper in partial fulfillment with their statements will receive cash refunds for the bond they have already received at no discount.

Meanwhile, depositors who have already discounted all or half of their bond will now receive a full refund of the discount they have suffered in currency.

“Notice is hereby provided that with effect from Wednesday 16 September 2020, affected depositors will contact any branch of Consolidated Bank Ghana Ltd“ (CBG) ”the paying bank to access their newly generated Cash accounts which were originally designated as Commercial Paper (Bond) accounts at the bank ”, the statement directed.

It should be recalled that the Receiver granted a government-supported non-interest – bearing financial instrument in April 2020 to the defunct institutions whose validated and accepted claims in the resolution exercises were not completely extinguished by the allocation of the cash portion of the government financing offered for that reason.

For a term of five years with 10 equivalent instalments every six months as the drawdowns, the tenor for the bond was.

For March 31, 2021, the date of the first drawdown payment was expected.

Of the GHS 6.49 billion required for all eligible depositor claims to be completely resolved, roughly GHS3.56 billion (55%) of these claims were initially resolved with government-backed bonds.

GHS 2.93 billion (45 percent) has already been issued in cash and bonds to certain depositors of these settled firms.

“Nevertheless, there were fears that this approach, the non-interest – bearing nature of the bond and the tenor” did not make the bond financially appealing, resulting in a substantial reduction in the value of their claims.

As part of the financial sector cleanup, 347 microfinance companies were authorised by the Bank of Ghana on May 31 , 2019.

In August 2019 , the Bank of Ghana also revoked the licenses of 23 insolvent firms in Savings and Loans and Finance Houses.

These acts is compliant with Section 123(1) of the Banks and Specialized Deposit-Taking Institutions Act , 2016 (Act 930), which allows the Bank of Ghana to withdraw the Bank or Specialized Deposit-Taking Institution (SDI) license if the Bank of Ghana decides that the institution is insolvent.

Source: https://citinewsroom.com/